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Thursday, October 25, 2007

CHEAP AMERICAN LABOR

A friend of mine works for a music studio. He said that a lot of their business is coming from oversears because they can pay whatever the full price of the studio is, and for them it's a bargain. The next day, a UK manager came into our office and said that he's been sending his bands over here to record because even at full price -- with hotel costs, studio costs, and perdiem -- it's all a lot cheaper than they would pay in England.

This is when I realized that America, at least the music industry, is now offering cheap labor to everyone else. It's like how we go to China and Mexico for labor because it's cheap, and think we're gettingn a bargain... but then everyone says we're taking advantage of the less privilaged. That's us. That's what we've become to other nations.

It's weird to me.

I'm hoping that this sort of thing will help our economy in some weird way. We're in peril. We used to be too expensive for everyone. The Canadian dollar is basically equal to the American dollar. The British pound is twice (if not more) the american dollar. It's probably going to get worse.

This is why I havent visited the UK in sometime and declared to many of my britisih friends "I hate the UK." It's not that I hate the UK, it's just that I hate that I can't afford it. I can afford mexico, i think. I can afford the midwest, i'm pretty sure, but what fun is Cleveland? Everything is catching up to us. It's embarssing. The only benefit that I'm feeling right now is that when my british friends come to town, I dont feel bad about them paying for things for me -- lunch, brunch, drinks, dinner -- i really dont mind.

Of course the war has a lot to do with this. As does 9/11. As does Katrina. As will the fires in California. So what do we do? I'm seriously asking -- what do we do? Obviously, this blog is not a political one of any sorts... it's just a spot for me to muse about things, and right now it's 5am and I'm unable to sleep because of this issue.

We've become pathetic. We used to be such a great nation that was prosperous and comepeditive and now we're just the place people go when they want to save a dollar.

A way it's close to home for me is that Stolen Transmission cant even think about signing a UK artist. Even if offering the most that we can offer, it'd still be an embarassing offer to anyone over there... but meanwhile, our oil prices are intense and to keep our bands on the road has become ridiculously unprofitable for everyone but Exxon. They make a meager amount playing shows and spend whatever earnings they make on gas money. I've been trying to get my bands to switch to grease-not-gas, but they all have regular gas vans that, when attempted to be sold would never come close to helping them afford a diesel van that could be converted to this amazingly helpful and in the long run, profitable process. It's so hard and painful to watch and hear my managers call and say "we just need to afford gas" and not knowing how to help them. I don't know what to do.

I'm sorry, i'm just venting. I can't sleep. I'm scared and worried about what our future holds. It makes me so depressed and left with a feeling of helplessness.

23 comments:

Anonymous
said...

It's called outsourcing and globalization. Provides menial jobs for countries overseas and keeps prices low on american goods. Also takes factory jobs from american workers, eventually forcing the next generations to be educated and qualified for the jobs that remain in the states.

By the way, it has very little to do with oil. Europe raised the tax on oil so it's way more expensive to drive around there than it is here.

We're still the richest, most powerful nation on earth. The only country coming close to us, economically, is China and that's because of how much we've invested in their cheap labor.

England isn't paradise, I'm tired of all the american anglophiles idealizing it.

as a native austrian, and european, i think 9/11 changed all things for everyone. in europe, you´ll pay so much for oil and to have a car is much expensive than in the US. and some economists meant that the price of gas is up to get a historical high a the end of the year. thats also very depressing for us here.

here are some mid europe facts if you havin a mid level native act.

germany/austria for example:recording a single in a mid level studio: 400/day - it takes 3 days to finish it most time.

single release:1500 - 2000 for manufacturing1000 for promotion (thats a minimum to get a lil bit attention even myspace and online pr isn´t effective here)

there are also other costs. telephone calls, gas etc...but most bands didn´t count them at this stadium. they need to make them.

touring:gas: 30/ day if they tour through germany in a normal van80/day for the van150/day for engineering guy25/day for accomondation in a regular low price hostel-income:single or cd release: nothing.most time they make a huge minus.touring: it ranges from 300 to 1000a day at this time.merchandising: doesn´t matter...to produce this stuff is expensive. -if a european act fly over to US, they even get more for less money. because the dollar is very low at the moment. euro is a very strong currency. so i realy can understand why europe acts come over.

@anonymous:the US is still the richest country? probably. but the social problems are same as in states as india and china. now nationwide health care and social system. that is a shame. rich people of course but more and more poor ones. the american dream is a nightmare at these days.

by the way...oil price is really high. indeed, in europe, tax is higher than in the US. but these tax is important to set up climate programms etc. we have reduced our co2 emissions since kyoto was signed.

anyway...michael moore didn´t show up any new thing for europeans. his movies show up well known things. we get this informations about the US from many sides.

in my opinion, it´s really time to change the US, the goverment etc to become powerful again and loose this very bad image wich this nation get over the last 6 years since the actual goverment or whoever leads.

@sarah...there should be more like you. thinking about very important thing for the future in a sleeplessnight. if that happened, a change will be possible over the next 10 or 15 years.

cheers. and sorry for my english. hope there wasn´t too much mistakes.

From a macro point of view, it's just the way the wind's blowing right now. The credit slump + gradually declining economic figures are what's fucking us right now. Not too mention coked-up, greedy foreign exchange traders.

I think your bigger and more immediate problem is that folks don't buy music anymore.

We are the richest and we have the best medical care, even if we may not have the best health care system. And, yes, there are plenty of poor people but the majority of the country falls in the middle class and we have less poverty than most places.

I wasn't saying I disagreed with the european oil tax, I'm all for it. We need to stop using fossil fuels right now before we irreperably fuck up our environment. But obv the U.S. is more concerned about economic interests than preserving the planet.

Btw, I think we all need to realize that america represents much more than just the past 6 years. Anyone who thinks so is foolish and ignorant.

Sarah, you're starting to sound like a Seattle rioter. I'm sick of all these people who have a problem with globalization. Why the hell should some random boundary determine who gets what goods? That makes no damn sense to me other than it's white people in the developed countries who claim they want to protect the "working class" (those lucky enough to know someone to get them a union job).

Why is the dollar low? Because we've kept interest rates low for way too long and allowed asset inflation to occur. As for oil and gold, for instance, their prices aren't rising nearly as much when priced in euro or pound terms. Thus, a huge chunk of the cost increases are due to a weakened dollar (Low interest rates leads to more inflation which leads to a weakened dollar).

So what's the upside to all this? Well, for one, yes, the US is finally cheap labor. Those who complained that we weren't exporting enough should be happy because we will have an easier time doing so. Inflation and foreign exchange aren't at the same speeds so, for a while at least, US goods and services (music being one of them) will be cheaper to foreign buyers.

There is nothing wrong with any of this so long as we keep inflation realtively under control. However, we had asset inflation (real estate, stocks, etc.) which doesn't show up immediately on grocery shelves but which, over time, has an effect (higher rents, for instance, eventually get passed on to consumers).

Free trade, in my opinion, is not just a good thing. It is something sacred and any attempts to thwart it should be deemed a sin. Thanks to free trade (and deregulation), India and China are no longer basket cases but now have hope. Sure, there are some kinks to work out, but compared to what was going on during the '70s, this is paradise.

There is no reason to complain about how the world's economy is shaping up. Just allow it to do so. It's understandable that people in developed countries want some sort of level playing field on such issues as workers' health and safety in the workplace. Outside of that, though, we should be happy to see our shelves flooded with Brazilian, Russian, Indian, and Chinese goods. And, it's good to see American goods (and CDs) in their countries, too. Everyone wants "One World". Stop complaining when it happens.

like lawrence mentioned, the relatively low dollar value actually helps the US economy in a couple of ways.

the gov. is not protecting the falling dollar rate on purpose because it also keeps the exporting good price low.

i don't understand why you said we've become pathetic, it's kind of offensive. are you saying that other developing countries are pathetic because developed countries have been outsourcing there?

outsourcing can revitalize local and national economy so it's not a total exploitation on mnc's part. it's an absurd idea to think that we'll be on top of the world economy forever. US will be a power player for a while but its top place will be replaced within our lifetime.

believe me, as someone who's travelled to various countries including UK, Peru and India this year I've witnessed weakening dollar all around the world, (actually an Indian merchant scoffed and said "well dollar isn't worth much nowadays" as I protested against the exchanged amount) sure it's bad for individuals, but overall, it can do the nation good.

"free trade" only benefits rich consumers. our world is based on the buying and selling of products we dont need and are persuaded to buy to make ourselves feel better...esp in north america. europeans know how to enjoy a good wine, not work too much and enjoy life for what it is.

To say without context that gas in Europe is more expensive is deceptive. Unless you live in New York City, you HAVE to own a car. We don't have good public transportation here. If I want to take a train, I still have to drive a half hour to the closest station. The suburbs don't have frequent, reliable buses or trains if they have buses or trains at all. Every American adult uses gas every day. End tangent.

On point: Aren't the Horrors on ST? Aren't they British or am I mistaken? I don't really understand what you're talking about. The fact that studio time is cheaper here than in England is not indicative of any greater economic picture.

@anonymus...HORRORS haven´t relased a record at stolen transmission since they signed. so i think it´s more for a booking than a record deal as they are on LOOG records in the UK. but its also possible that sarah will relase their actual album over ST this or next year. even it´s not distributet in US at the moment.

-of course, in europe we probably have a better public transport system. but there are still many cars in the citys. and even we have subway systems etc...more regular traffic was coming up over the last year. so in fact...it´s very expensive if you have those horrible gas price.

only in london there is less regular traffic...but thats only because you need to pay if you drive through the city.

Whoever it was who just railed against free trade and then urged us to vote for Ron Paul knows nothing about Ron Paul's politics and views on the matter. Or about free trade. Ron Paul is a free trade advocate but he doesn't like things like NAFTA or CAFTA because he doesn't like the accompanying bureaucracy. It makes me sick that all these people are supporting Ron Paul thinking he's some kind of left wing Republican because he's against the war in Iraq. He's not. He's a libertarian, not a socialist (I happen to like a lot of Ron Paul's views on government and they closely match my own though he's dead wrong on Israel). The problem with a lot of young American voters is that they are so used to this sort of political football game of "us versus them" that they think if someone agrees with them on one thing, he agrees with them on everything else. Ron Paul's views on, say, healthcare, abortion, or free trade would make most Democrats blanch. But, typical morons that think they know something about politics because they once in a while maybe read a pamphlet from some girl who passed one out at their college are too lazy to sit down and actually read what each candidate is about.

As for free trade, it doesn't help the rich consumers as much as it helps the poor consumers. For instance, the products sold at everyone's favorite whipping boy, Walmart, are low in part because they are produced in China. Last I checked, Walmart's demos skews towards the lower income levels (Walmart is believed to contribute to a significant degree the relatively lower inflation rates we've had for the past couple of decades). Free trade helps the poor by keeping prices down. That's the whole point. Closing the borders to cheaper goods is how you make a nation's poor suffer in the long run. The poor are the ones who are forced to pay a higher share of their income when prices are higher and values are lower.

If you really care about poor people, you'd be for free trade. If you're for protecting a few union jobs at the expense of jobs for many, then be against free trade. It's that simple.

let's say your walmart example is correct. why should we help the poor in this country at the expense of poor people in china? they suffer and we get cheap products that we don't really need. i don't really agree that walmart helps the poor because in the long run the healthcare costs from shopping at walmart and other "cheap" places will be more than if you bought organic food and actually took care of yourself.

i think people are laughing at the concept of "free trade" in that we actually have a free and fair system when everyone knows it is corrupt.

ron paul resonates with people because he is the first honest politician we've seen in a while. no one wants war mongers that want to invade iran. hillary is the same old...rudy would be awful for this country. obama is okay but really what has he done to prove himself.

the real problem with voters is that they are suppressed by the republican party in states like ohio and florida, and if you deny that then you are completely blind to what really happens in politics.

So, you suggest we not create a market for Chinese and/or Indian goods, thereby forcing Chinese and Indian factories to fire their workers and putting them back into the poverty that they have been working their way out of. That way, our government and charities can throw billions in aid dollars at them and we can be back to where we were during the Cold War. Yeah, great economics there.

And what do you mean buy "cheap products they don't really need"? This is a free market. You show up to a store with the little dollars you have and decide for yourself what you want. If you want a lousy Dave Matthews Band album, that's your choice. Likewise with many other things.

I don't think you've ever set foot in a "dollar store" or in a strip mall outside a major city. The quality of the merchandise was and is crap. What Walmart did by driving prices lower (and driving a lot of these stores out of business) is somewhat -- albeit modestly -- improve the quality of the merchandise while lowering costs. And, no one put guns to people's heads to shop there.

As for your non sequitir about healthcare, that's not from imported food products. That's from high-fat products produced right here in the good ole US of A. And, had you actually been to a Walmart, you'd see they're now offering some perscription drugs at $4 because they're applying their cut-throat tactics as a large buyer of products to pharmaceuticals as well. (As a side note, I can't believe I'm stuck here defending friggin' Walmart especially when I think its management is getting clueless by the hour on a whole host of things. But that's another issue).

On Ron Paul, he's not the only honest guy running. I like him in general and have for years. But, again, I think most people saying they like him don't really get the libertarian agenda.

i´ve read ron pauls issues and i only think he´s a better choice for the presidential race, thanthis former new york city mayor is (in fact, rudy leads the actual polls with 29%).

but i don´t understand what paul meant with this opinion about war:"Under no circumstances should the U.S. again go to war as the result of a resolution that comes from an unelected, foreign body, such as the United Nations."

if you take a look at the actual iraqi war, the United nations haven´t gave the US goverment any resultion to start this war. it was a decision made by the US goverment, without any UN influence.

but anyway. i really hope that "rudy" didn´t win the race next year. his thoughts about this fuckin war on terror are horrible.

he pray for the success of the iraq war. what a stupid opinion. it´s the vietnam of the 21st century...he really should realize that fact. there is no winner, at the end.

by the way...my cousin and his wife live in chicago, both are US citizens. and both support hillary for the next president.

is there no other option than putting these people to work to make our cheap goods? yes it is better than poverty but it is not a good life as they aren't treated well in these factories as everyone knows. curious what you think about that.

you are right..people do get to choose what they want. i guess i don't really believe that it's a free choice because there are millions of dollars spent trying to figure out ways to secretly and not so secretly make us buy goods. so are we really controlling our wants/desires or is the billion/trillion dollar ad industry controlling what we really want. any thougths on that?just curious, who do you support in this election?

About Me

Sarah Lewitinn (born February 3, 1980), also known by her nickname Ultragrrrl, is a music critic, DJ, and blogger. She gained notoriety as an assistant editor at SPIN Magazine.
In 2006, New York magazine named Lewitinn as one of "The Most Influential People in Music", citing that "she has more power than any print music critic".